Obama: CC reform bill by Memorial Day
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Obama: CC reform bill by Memorial Day
| Fri, 05-15-2009 - 11:19am |
Obama wants credit card reform bill by Memorial Day
http://televisionwashington.com/floater_article1.aspx?lang=en&t=3&id=10468
US President Barack Obama on Thursday asked lawmakers to pass a credit card reform bill by the end of May, saying such reforms are critical to fixing the nation’s economy.
“It’s time for strong, reliable protections for our consumers. It’s time for reform that is built on transparency and accountability and mutual responsibility,†he said at a town hall event in New Mexico, according to Reuters.
Obama is pressing for legislation that would end some credit card industry practices deemed abusive, such as unfair rate increases and late fees, reports the Associated Press.
“We expect to pay what’s fair and not just what fattens growing profits for some credit card company,†Obama was quoted by Reuters as saying.
The US Senate is expected to vote on credit card legislation later today. Obama said today that he wants a bill on his desk by Memorial Day, 25 May.
White House officials have said that penalty fees now total 15 billion dollars per year, or 10 percent of credit card revenues, reports the Wall Street Journal.
More than 75 percent of American households have a credit card, and some 44 percent carry a balance.


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http://www.boston.com/business/personalfinance/articles/2009/05/15/this_bill_is_way_overdue?mode=PF
There are so many outrageous things that go on in the credit card business it's hard to know where to start.
How about the industry's warning about the current credit card reform movement? Beware, it could reduce the availability of credit to some customers and drive up the price for everyone else. The people who might have mailed credit cards to a Chia Pet a couple of years ago are lecturing Washington on responsibility.
Speaking of federal reform legislation, one question. How hard can this be?
The House passed a bill at the end of last month that addresses most of the issues. The vote, in case it's starting to fade from memory, was 357 to 70. That included more than 100 Republicans voting in favor.
President Obama has been banging the drum on credit card legislation so long his arms must be exhausted. He wants a bill to sign by Memorial Day weekend. The president held a town meeting in Rio Rancho, N.M., yesterday making the same points.
Meanwhile, the Senate may or may not vote on its own credit card legislation this week. Approval that seemed simple got bogged down. The bill became an amendment magnet, slowing progress on legislation that comes with 21 cosponsors. That's one in every five senators who have slapped their name on a bill that looks a lot like the House version.
Credit card reform is a no-brainer, politically speaking. The companies that issue credit cards, mostly but not exclusively banks, are guilty on multiple counts. The worst practices of some issuers are truly disgusting and many of the biggest issuers face the consequences of their own irresponsibility. Financial companies may have a lot of lobbying juice, but they don't stand a chance on this one.
The legislative response has hardly been radical. Read a list of actions a new law would probably prohibit and you will be amazed that several of them are legal or widely practiced to begin with.
One example: So-called double-cycle billing, averaging out current and previous balances so customers may be paying interest on principal they already paid down the previous month. Some, not all, credit card issuers do this; that would stop.
One more: Applying payments to the lowest-interest card balances while more expensive debts pile up. That would change, too.
But most of the emphasis of credit card reform legislation is aimed at simple things all consumers can appreciate, such as a greater sense of fairness and transparency. It would be harder to change rates and fees with a snap of the fingers. What does change has to be spelled out in plain English, in print that doesn't require a magnifying glass.
One last important change: Credit card marketers would face new limits or bans when it comes to pitching plastic to teenagers and other youngsters.
What about a legal ceiling on rates? Credit card issuers are scared to death over this, but it's unlikely to happen.
One proposed Senate amendment to cap credit card rates at 15 percent was shot down this week. But what would happen if someone proposed a cap of 25 percent? Would it kill a reform bill? Would legislators actually argue that credit card companies need the flexibility to charge more than that?
Credit cards can skirt most usury laws, but interest rate limits were standard as recently as 1978. At that time, the caps were around 18 to 21 percent. Those were the limits of decency, once upon a time.
The banks and other companies that dominate the credit card business are in serious trouble now. The Treasury's recent stress tests suggested that most industry leaders could suffer losses on 20 to 23 percent of credit card balances over the next two years if the economy takes another hit.
They might have my sympathy if I didn't know what everyone in America knows, that credit card issuers dumped an endless supply of easy credit in mailboxes across the country for years. The business strategy paid off, until it didn't. The typical American household carries more than $8,000 in credit card debt now, and most are paying it off as they can.
Some borrowers were irresponsible and have to deal with the consequences. The same goes for reckless lenders. In the meantime, a reform law enacted by Memorial Day would be a step in the right direction.
The credit card companies send out fair too many ads to increase credit card spending.
For months my CC company have been calling, to the point of being annoying, about lowering my interest rate. Yesterday I received a letter raising it to a variable prime plus 14.65% it was fixed 8.5%. We pay our cards off each month but the people carrying balances this really going to hurt. Squeezing that last drop of blood.
Credit card reforms up for Senate vote
Complete article at link....
http://www.google.com/hostednews/ap/article/ALeqM5hfMsNdPKrayQbV8JSYqKXphY7FfgD98993LO0
Unable to stop the tide of foreclosures and job losses, lawmakers are hoping to give voters at least some breathing room in the economic downturn by banning arbitrary credit card rate hikes and excessive fees.
Legislation that would impose new restrictions on the industry was expected to pass the Senate on Tuesday. With the House having endorsed a similar measure already, Democratic leaders said they hoped to send a final version to the president to sign by week's end.
If Obama signs the bill, as expected, the credit card industry would be required within nine months to change the way it does business: Lenders would have to post their credit card agreements on the Internet, let customers pay their bills online or by phone for free and give customers 45 days notice and an explanation before interest rates are increased.
Edited 5/19/2009 7:46 am ET by libraone
Senate Passes Bill Curtailing Credit Card Industry
The Senate today overwhelmingly passed a bill that would sharply curtail credit card issuers' ability to raise interest rates and charge fees, taking a critical step in reforming an industry that has gone largely unregulated for decades.
In a 90-5 vote, the Senate delivered a victory to consumer groups and to the White House, who blame industry practices for sending Americans deeper into debt just as they are losing their jobs and their homes.
Lawmakers will now turn to reconciling differences with a similar bill passed by the House on April 30. President Obama has said he wants to sign a bill into law by Memorial Day. More....
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/19/AR2009051901867.html?hpid=topnews
Yeah, we only charge what we can pay as well.
They are a bunch of shrews.
I think it's a sad day when Americans are too stupid to read and understand their credit card agreement and have to rely on the government to make changes to the industry.
Now, the stupid people will be protected. The ones who have no idea how to budget or spend within their means are rewarded because, somehow, they have been brainwashed into thinking that they are now the victims.
The people who are responsible and pay their payment every month, on time, are punished.
Wow....thanks Obama. How did I ever manage to live this long without you and your 'protection'?
Now, I have to give up my credit card all together because it will cost me. I will now be paying annual fees, immediate interest on purchases, and an increased interest rate, when before, I paid none of these.
Remind me again, why is this better?
I think it's pathetic that grown up people do not know how to 'read the fine print' in any contract. Every contract that you ever sign has fine print...it is your duty to find it, read it, and understand it. If you don't understand it, it is your responsibility to ask questions until you know the answers.
Relying on the government to "take care of us" and make sure that we don't get ourselves into trouble with our finances is ridiculous.
I do not need Obama or any other government representative to think they know what is best for me. I can take care of myself just fine...I wish more Americans would just quit playing the victim all the time and take responsibility for their finances, mortgages, life, etc.
Just think, thanks to Obama, now when you charge your vacation on your credit card...the interest starts accumulating immediately. Isn't that wonderful? <= dripping in sarcasm.
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